Weekly Market Navigator

Week of July 27, 2026

Published every Monday: Get a detailed snapshot of what moved the markets last week—and what to watch this week.

Earnings take a back seat to the Middle East.

Sell-offs in several large-cap growth stocks following earnings reports dragged equity markets lower. Eight U.S. sectors had positive returns, however, highlighting a stronger underlying market. A nearly 13 percent rise in crude oil prices due to the war in the Middle East pushed 10-year Treasury yields to 4.7 percent.

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Weekly Quick Hits

Beyond the Headlines

Earnings take a back seat to the Middle East.

Report Releases

With no major economic releases last week, investors focused on geopolitics and

Financial Market Data

Declines in some high-profile stocks dragged markets lower.

Looking Ahead

The Fed’s decision on interest rates highlights a busy data week.

BEYOND THE HEADLINES:

Earnings take a back seat to the Middle East.

Although earnings have continued to beat expectations, equity markets endured a roller-coaster week as oil prices took center stage. Less than one month ago, after the signing of a memorandum of understanding (MOU) to end the war in the Middle East, market participants appeared to price in the likelihood of a final deal and a full reopening of the Strait of Hormuz. West Texas Intermediate oil prices fell to levels not seen since the war began.

Unfortunately, that scenario hasn’t unfolded. Now, the market is trying to determine the end game in the Middle East and when it will happen. At least in the short term, corporate fundamentals have taken a back seat.

Geopolitical Risk Never Went Away
When a positive outlook becomes consensus, it tends to lead to rallies—but it can also set up the potential for disappointment. Three weeks after bottoming at levels last seen in February, before the start of the war, oil prices rallied and approached $95 per barrel. Hindsight is always 20/20. The MOU failed to lead to progress, the ceasefire ended, military action escalated, and crude oil products aren’t moving through the strait at the rate needed to bring relief to global oil supplies and prices.

Given that backdrop, it’s easy to understand why volatility has increased recently. At the same time, investors aren’t as concerned as they were in March, partly because progress has been made toward ending the conflict. The longer it takes to reach a peace deal while oil prices remain elevated, however, the greater the potential for economic effects. Conversely, if talks resume and show progress, oil prices could decline quickly.

Earnings Continue to Be Strong
Another reason market action has been orderly is strong fundamentals. Although the bulk of S&P 500 companies have yet to report second-quarter earnings, growth has so far exceeded lofty expectations for 22 percent growth. Even excluding a sizable gain by Alphabet, earnings growth for the quarter is approaching 26 percent. That would represent consecutive quarters of more than 20 percent earnings growth for the index. Given the current economic backdrop, that is impressive.

Diversified Portfolios Are Critical
Pullbacks always cause concern, and there are certainly risks investors need to be aware of. It’s fundamentals that drive long-term returns, however, and they remain in solid shape. The sell-off has been concentrated in higher-profile growth stocks, which has pressured headline index returns. As a result, though the Nasdaq Composite has fallen 5 percent over the past two weeks, the equal-weighted S&P 500 has been roughly flat. That is encouraging for diversified portfolios.

“The MOU failed to lead to progress, the ceasefire ended, military action escalated, and crude oil products aren't moving through the strait at the rate needed to bring relief to global oil supplies and prices.”

Report Releases: July 20–24, 2026

The Takeaway

With no major economic reports last week, the market focused on headlines from the Middle East. Military action between the U.S. and Iran escalated as talks to end the war unraveled—and oil prices rose as a result.
Earnings reports generally remained strong, though Alphabet, Tesla, and Intel came under pressure after reporting.

Financial Market Data

Equity

Markets closed lower in the U.S. The declines were led by a roughly 2 percent decline in the Nasdaq Composite and a 1 percent drop in the Russell 2000. The losses were concentrated in two sectors: communication services and consumer discretionary, which each fell more than 6 percent. Eight sectors had positive returns, however, indicating a strong underlying market. With crude oil prices rising nearly 13 percent, the energy sector rallied almost 4 percent. International markets bucked the trend and rose marginally.

Fixed Income

Rising oil prices led to higher rates, which pressured fixed income returns. Yields on the 10-year Treasury briefly traded above 4.7 percent for the first time in 18 months, ending the week at 4.68 percent. Core bonds, Treasuries, and mortgages dropped 0.5 percent to 0.75 percent. Municipal markets declined roughly 1 percent.

The Takeaway

Declines in large-cap companies caused the communication services and consumer discretionary sectors to fall 6 percent each, dragging markets lower. Eight sectors had positive returns, however, indicating a stronger underlying market.
Fixed income markets declined as the yield on the 10-year Treasury briefly reached 4.7 percent.

Looking Ahead

It will be a busy week that includes economic reports, high-profile earnings, and the Federal Open Market Committee’s (FOMC’s) July decision on interest rates.

The week kicks off Monday with the advance durable goods orders report for June. Orders are expected to rebound after a transportation sector–led decline in May.
On Tuesday, we’ll see the Conference Board Consumer Confidence Index for July. Expectations are for a slight improvement in confidence.
The FOMC interest rate decision for July will be announced on Wednesday. Despite rising inflation, the committee is expected to leave rates unchanged
On Thursday, we’ll see the advance estimate of GDP for the second quarter, along with personal income and spending reports for June.
Lastly, many companies will report second-quarter earnings, including Microsoft, Meta Platforms, Apple, and Amazon.

Disclosure: This material is intended for informational/educational purposes only and should not be construed as investment advice, a solicitation, or a recommendation to buy or sell any security or investment product. Diversification does not assure a profit or protect against loss in declining markets, and diversification cannot guarantee that any objective or goal will be achieved. Please contact your financial professional for more information specific to your situation.

Bonds are subject to availability and market conditions; some have call features that may affect income. Bond prices and yields are inversely related: when the price goes up, the yield goes down, and vice versa. Market risk is a consideration if sold or redeemed prior to maturity.

Certain sections of this commentary contain forward-looking statements that are based on our reasonable expectations, estimates, projections, and assumptions. Forward-looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. All indices are unmanaged and are not available for direct investment by the public. Past performance is not indicative of future results. The S&P 500 is based on the average performance of the 500 industrial stocks monitored by Standard & Poor’s. The Nasdaq Composite Index measures the performance of all issues listed in the Nasdaq Stock Market, except for rights, warrants, units, and convertible debentures. The Dow Jones Industrial Average is computed by summing the prices of the stocks of 30 large companies and then dividing that total by an adjusted value, one which has been adjusted over the years to account for the effects of stock splits on the prices of the 30 companies. Dividends are reinvested to reflect the actual performance of the underlying securities. The MSCI EAFE Index is a float-adjusted market capitalization index designed to measure developed market equity performance, excluding the U.S. and Canada. The MSCI Emerging Markets Index is a market capitalization-weighted index composed of companies representative of the market structure of 26 emerging market countries in Europe, Latin America, and the Pacific Basin. The Russell 2000® Index measures the performance of the 2,000 smallest companies in the Russell 3000® Index. The Bloomberg US Aggregate Bond Index is an unmanaged market value-weighted performance benchmark for investment-grade fixed-rate debt issues, including government, corporate, asset-backed, and mortgage-backed securities with maturities of at least one year. The U.S. Treasury Index is based on the auctions of U.S. Treasury bills, or on the U.S. Treasury’s daily yield curve. The Bloomberg US Mortgage Backed Securities (MBS) Index is an unmanaged market value-weighted index of 15- and 30-year fixed-rate securities backed by mortgage pools of the Government National Mortgage Association (GNMA), Federal National Mortgage Association (Fannie Mae), and the Federal Home Loan Mortgage Corporation (FHLMC), and balloon mortgages with fixed-rate coupons. The Bloomberg US Municipal Index includes investment-grade, tax-exempt, and fixed-rate bonds with long-term maturities (greater than 2 years) selected from issues larger than $50 million. One basis point is equal to 1/100th of 1 percent, or 0.01 percent.

Authored by the Investment Research team at Commonwealth Financial Network^®.

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